India: Don’t Look Now, But . . .

So while we wait for the fallout from the massive bailout of Spanish banks that has unfolded over the last 72 hours, and ponder the prospect of a breakdown in China’s economy discussed here yesterday, let’s not overlook the other tiger of Asian economic growth—India. The Economist warns this week (“Farewell to Incredible India”) that its economy may be on the wane, too:

IN A world economy as troubled as today’s, news that India’s growth rate has fallen to 5.3% may not seem important. But the rate is the lowest in seven years, and the sputtering of India’s economic miracle carries social costs that could surpass the pain in the euro zone. The near double-digit pace of growth that India enjoyed in 2004-08, if sustained, promised to lift hundreds of millions of Indians out of poverty—and quickly. Jobs would be created for all the young people who will reach working age in the coming decades, one of the biggest, and potentially scariest, demographic bulges the world has seen. . . The omens, frankly, are not good.